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Question

From the following information relating to the business of Abhay who keeps books on Single Entry System, ascertain the profit or loss for the year 2018–19:
1st April, 2018
(₹)
31st March, 2019
(₹)
Machinery
8,000
8,000
Furniture
2,000
2,000
Stock
7,000
5,000
Sundry Debtors
4,000
4,500
Bank Balance
200 (Cr.)
1,800 (Dr.)
Sundry Creditors
5,000
3,500

Abhay withdrew ₹ 4,100 during the year to meet his household expenses. He introduced ₹ 300 as fresh capital on 15th January, 2019. Machinery and Furniture are to be depreciated at 10% and 5% p.a. respectively.

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Solution

Statement of Affairs

as on April 01, 2018

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Bank Overdraft

200

Machinery

8,000

Sundry Creditors

5,000

Furniture

2,000

Capital (Balancing Figure)

15,800

Stock

7,000

Sundry Debtors

4,000

21,000

21,000

Statement of Affairs

as on March 31, 2019

Liabilities

Amount

(₹)

Assets

Amount

(₹)

Sundry Creditors

3,500

Machinery

8,000

Capital (Balancing Figure)

16,900

Less: 10% Depreciation

(800)

7,200

Furniture

2,000

Less: 5% Depreciation

(100)

1,900

Stock

5,000

Sundry Debtors

4,500

Bank Balance

1,800

20,400

20,400

Statement of Profit or Loss

for the year ended March 31, 2019

Particulars

Amount

(₹)

Capital as on March 31, 2019

16,900

Add: Drawings

4,100

21,000

Less: Additional Capital Introduced

(300)

Adjusted Capital as on March 31, 2019

20,700

Less: Capital as on April 01, 2018

(15,800)

Profit made during the year 2018-19

4,900


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